AMSTERDAM (Reuters) - In a legal setback for Beijing, an arbitration court in the Netherlands ruled on Thursday that it has jurisdiction to hear some territorial claims the Philippines has filed against China over disputed areas in the South China Sea.

Manila filed the case in 2013 to seek a ruling on its right to exploit the South China Sea waters in its 200-nautical mile exclusive economic zone (EEZ) as allowed under the United Nations Convention on the Law of the Sea (UNCLOS).

The Hague-based Permanent Court of Arbitration rejected Beijing's claim that the disputes were about territorial sovereignty and said additional hearings would be held to decide the merits of the Philippines' arguments.

China has boycotted the proceedings and rejects the court's authority in the case. Beijing claims sovereignty over almost the entire South China Sea, dismissing claims to parts of it from Vietnam, the Philippines, Taiwan, Malaysia and Brunei.

The tribunal found it had authority to hear seven of Manila's submissions under UNCLOS and China's decision not to participate did "not deprive the tribunal of jurisdiction".

The Chinese government, facing international legal scrutiny for the first time over its assertiveness in the South China Sea, would neither participate in nor accept the case, Vice Foreign Minister Liu Zhenmin told reporters.

"The result of this arbitration will not impact China's sovereignty, rights or jurisdiction over the South China Sea under historical facts and international law," Liu said.

"From this ruling you can see the Philippines' aim in presenting the case is not to resolve the dispute. Its aim is to deny China's rights in the South China Sea and confirm its own rights in the South China Sea."

The Philippine government welcomed the decision.

Solicitor General Florin Hilbay, Manila's chief lawyer in the case, said the ruling represented a "significant step forward in the Philippines' quest for a peaceful, impartial resolution of the disputes between the parties and the clarification of their rights under UNCLOS".

Bonnie Glaser, a South China Sea expert at the Center for Strategic and International Studies in Washington, called the outcome "a major blow for China given that the opinion explicitly rejects China's arguments that ... the Philippines has not done enough to negotiate the issues with China."

The United States, a treaty ally of the Philippines that this week challenged Beijing's pursuit of territorial claims by sailing close to artificial islands China has constructed in the South China Sea, welcomed the decision, according to a senior U.S. defence official.

"It shows that judging issues like this on the basis of international law and international practice are a viable way of, at a minimum, managing territorial conflicts if not resolving them," the official said, speaking on condition of anonymity.

Another U.S. official said the tribunal's decision undercut China's claims under the so-called nine-dashed line that takes in about 90 percent of the 3.5 million sq km (1.35 million sq mile) South China Sea on Chinese maps.

This vague boundary was officially published on a map by China's Nationalist government in 1947 and has been included in subsequent maps under Communist rule.

"You can't say that the nine-dashed line is indisputable anymore because by acknowledging jurisdiction here the court has made clear that there is indeed a dispute," said the official, who asked not to be named. "To my mind, this announcement drives a stake through the heart of the nine-dash line."

The court's rulings are binding, although it has no power to enforce them and countries have ignored them in the past.

"QUESTIONABLE CLAIMS"

Nevertheless, the decision keeps the spotlight on China.

"Today's ruling is an important step forward in upholding international law against China's attempts to assert vast and, in my view, questionable claims in the South China Sea," said John McCain, chairman of the U.S. Senate's armed services committee.

On Thursday during a visit to Beijing, German Chancellor Angela Merkel suggested China go to international courts to resolve its rows over the South China Sea.

In a position paper in December, China argued the dispute was not covered by UNCLOS because it was ultimately a matter of sovereignty, not exploitation rights.

UNCLOS does not rule on sovereignty but it does outline a system of territory and economic zones that can be claimed from features such as islands, rocks and reefs.

The court said it could hear arguments including one contending that several South China Sea reefs and shoals were not important enough to base territorial claims on.

On seven other submissions, including that China had violated the Philippines' sovereign right to exploit its own territorial waters, the court said it would reserve judgment about jurisdiction until it had decided the merits of the case.

No date has been set for the next hearings.

The Permanent Court of Arbitration was established in the Netherlands in 1899 to encourage peaceful resolution of disputes between states, organisations and private parties. China and the Philippines are among its 117 member countries.

Photo: Philippine and US Marines board riverine patrol boats during a joint naval exercises at a marine base in Ternate west of Manila in October 2015. (AFP photo)Philippine and US Marines board riverine patrol boats during a joint naval exercises at a marine base in Terna... Read More

WASHINGTON: Pressure on China over its claims to most of the strategic South China Sea went up a couple of notches this week. First the US sent a warship, in its most direct challenge yet to Beijing's artificial island building. Then, over Chinese objections, an international tribunal ruled it had jurisdiction in a case brought by the Philippines on maritime claims.

Neither action appeared likely to stop China in its tracks, as it seeks to assert its control over resource-rich waters that it considers vital to its security. Beijing is expected to put a higher priority on what it sees as its strategic interests than its international reputation.

But it could damage China's efforts to win more respect on the global stage as it emerges as an economic and military power.

President Barack Obama’s decision to deploy the USS Lassen to challenge China’s expansionist claims in the South China Sea is welcome, though belated — but the US knows it needs follow-up naval action and astute US diplomacy to channel regional alarm about China.

The US display of naval power has been reinforced at week’s end by a partial victory for The Philippines with the Hague-based Court of Arbitration dismissing Beijing’s case and deciding it has jurisdiction to hear The Philippines’ claims against China over contested territory in the South China Sea.

This action on the water and in the court puts a possible brake on the huge momentum and success Beijing has enjoyed in expanding its military power into the South China Sea, depicting the Obama administration as ineffective and projecting a Chinese sphere of influence.

The stakes are now rising for both China and the US. Their rivalry in the South China Sea reflects a bigger and more dangerous power contest over the entire western Pacific, with vast consequences for the region, including Australia. The US naval operation this week was vital, given grave doubts about US leadership and resolution under Obama in meeting China’s assertiveness.

The entire world, including knew this US demonstration was coming. China’s rhetorical response was predictably shrill. Various Chinese ministers and officials branded the US naval action as “provocative”, as an “illegality” and as a threat to China’s sovereignty.

Its substantive response still awaits. The expectation is that China will continue, if not escalate, its military preparations in the South China Sea. Rarely has the US agonised for so long about a single ship gesture, with Obama being under pressure to act from Defence Secretary Ash Carter and senior military figures for many months.

The court ruling, however, puts China’s activities even more in the spotlight, with the potential to destroy the credibility of its position. While China refused to participate in the case, the victory by a US ally, The Philippines, casts more doubt on the validity of China’s position under international law.

The trend of American sentiment means it is highly unlikely the next US president, Democrat or Republican, will be as constrained as Obama has been in challenging China’s strategy of projecting its military power in one of the world’s busiest waterways.

China is changing the power balance decisively in the South China Sea. Since last year it has moved fast, caught out the US and conducted dredging and land-reclamation operations around three reefs. It is building airstrips, has completed a 3000m runway and is constructing support facilities. This will deliver China a platform significantly beyond its mainland to project military power.

China’s President Xi Jinping recently offered the assurance China was not militarising the region. This remark is so false it becomes contemptible. The entire purpose is military. It is part of a long-run Chinese strategy to establish military dominance in the western Pacific, intimidate its neighbours, create an expanded sphere of Chinese interest and raise the cost to the US of any military engagement.

For Australia, there are some harsh realities. China has given priority to this military strategy at the cost of trust and goodwill with its neighbourhood. That could be a mistake, but Australia needs to grasp the reality.

Malcolm Turnbull has criticised China’s “pushing the envelope” in the South China Sea, saying it had the “reverse consequence” of what China wanted to achieve with its neighbours. In fact, while China underestimated the regional reaction, the military expansion is a deliberate judgment by Beijing.

Michael Wesley, professor at the Coral Bell School at the Australian National University, tells Inquirer: “I have no doubt that China will continue with its current military plans. I believe that Xi Jinping sees Obama as weak. Xi will regard the period between now and the January 2017 inauguration of a new US president as a decisive window of opportunity for China. Recent events in the South China Sea tell us that China is prepared to take on the US. China believes it can get what it wants in the western ­Pacific without the risk of war. The result is that China is changing the facts on the ground and it is altering the strategic status quo. Other countries may object but they can’t oppose.”

The US was prudent this week. On immediate timing, it gave its allies such as Australia no prior warning of sailing its guided missile destroyer within 12 nautical miles of reefs used by China. The US did not ask Australia to participate. It has not asked Australia to take any action. There is no plan by the Turnbull government, at this stage, to duplicate the US action with Australian ships.

On the merits of the dispute, Australia’s stance is near identical with that of the US. The South China Sea is the location for protracted territorial disputes involving China, The Philippines, Vietnam, Malaysia and, further north, Japan and South Korea.

The US does not recognise China’s 12 nautical mile zone in relation to reefs that were once submerged, a situation that does not pass the tenets of international law. Australia disputes the work being carried out by China. It does not accept Chinese claims based on “creating” islands. It says the issue must be resolved by international arbitration and the norms of international law, but does not prejudge such outcomes.

The reason the US conducted this maritime operation is because it believes China is making excessive territorial claims inconsistent under international law. America demands that China halt reclamation and militarisation. The US is listening to regional alarms, defending its maritime interests and says it makes no prejudgments on competing territorial claims.

The consequence of China’s assertiveness has been a strong regional reaction against it. The US has been flooded with requests from the region to maintain a military presence to check or balance the rise of China. Hence the significance of the US “pivot” to Asia outlined in the Australian parliament when Obama visited in 2011.

The head of the National Security College at the ANU, Rory Medcalf, says: “While this US action was overdue, it is well-timed. With the summit season of meetings coming up in Asia, this gives the US the opportunity of mobilising diplomatic sentiment against China’s unilateral activity.

“Ideally, we need more such operations by other nations, not just the US, so that naval activity in these international waters becomes more normal.

“China’s long-term aim is to displace the US as the dominant power in the western Pacific. It wants to show the US is unreliable and impotent and what the US has done this week helps to counter such views. Regional opinion really counts for China. Beijing needs to avoid a situation where the US becomes, in effect, the leader of a regional coalition whose purpose is to balance the rise of China.”

At the Australia-US ministerial meeting 10 days ago, US Defence Secretary Carter said: “The US will fly, sail and operate whenever international law allows, as we do around the world, and the South China Sea is not and will not be an exception.”

After the meeting, referring to China, he said that “our nations favour peaceful resolutions to disputes and oppose coercion and infringement on well-established international norms especially in the face of rising tensions in the East and South China Sea”.

Carter said China’s tactics meant other countries were “asking for more interaction with the US and US Navy” and this “extends from Vietnam to India, to The Philippines to Japan”. He tied this to the US “pivot” to Asia, now described by the more polite term “rebalance”. Referring to regional demands for a strong US military presence, Carter said: “We are committed to meeting that ­demand.”

For months there have been divisions within the Obama administration about its response to China. Since his May speech at the Shangri-La Dialogue in Singapore, Carter has been pushing for such “sail through” action. More recently, the White House wanted to wait until after President Xi’s ­official visit to the US.

The test for Obama is: what next? The coming weeks will constitute a test of his Asian diplom­acy. This must be buttressed by proof the Lassen’s mission was not a one-off. US officials have said this will not be the last such operation — but converting it into a more regular naval “normality” will not be easy. While China tracked the Lassen, its overall response has been measured in recognition of the measured and long foreshadowed US operation. The problem for the US, even if its policy becomes more adroit, is how to check China’s strategy, which is based on the assumption that it can make incremental progress because the US is not prepared to instigate military conflict.

Just as there are divisions in the US government it is safe to assume there are divisions in Beijing. The task of the US should be to make Beijing’s current strategy more difficult, uncomfortable, less acceptable in the region and carrying a high cost in terms of US relations.

Wesley says: “I think the US, to this point, has assumed it needed China’s co-operation on a range of climate change and economic issues and that it was not prepared to risk things in Asia. I believe this sentiment is changing and that the voices in the US demanding that things be made more uncomfortable for China are rising.”

Defence Minister Marise Payne has made clear that Australia backs the principle on which the US based its naval action — freedom of navigation in international law.

This will be used to belt China over the head. She said Australia had a “legitimate interest” in trade, stability and international norms in the South China Sea. Beneath these words, of course, is the power conflict.

Asked for Labor’s position, foreign affairs spokeswoman Tanya Plibersek issued a cautious but supporting statement: “Like all nations, the United States has a right of passage through the oceans and skies of the region in accordance with international law.” She said any disagreement between claimant states should be resolved using international law.

While less muscular than Payne’s statement, Labor relies on the same principle and there is no sign of any Labor opposition to the Turnbull government stance.